Final expense insurance can be referenced by many different names; senior, burial or funeral insurance. Final expense is a whole life insurance that is purchased by seniors who want to cover the costs of funeral expenses, burial expenses and other final expenses after they die.
A typical Final expense insurance policy will provide up to $20,000 of insurance protection, with smaller coverage amounts available to cover things like cremation services. Without the proper planning it can be a bill that is left to your loved ones to deal with while they are mourning their loss. Final expense insurance is the best way to prepare for this. The money is there even after you have passed, allowing for you to pay for these expenses while allowing your loved ones to be able to mourn without this added stress. Like a normal whole life insurance policy, the policy is kept for the rest of a person’s life. It builds cash value overtime and policyholders can borrow against the cash value if they need to. The death benefit is paid out to the specified beneficiary and is tax-free.
Final expense insurance is generally associated with a permanent type of insurance policy like a whole life insurance policy. Final expense insurance has increased in popularity, because younger families do not buy whole life insurance policies as much anymore. Instead people are purchasing term-life insurance polices, which they use to cover children, college expenses, mortgage and other larger expenses. Once the caregivers are older and the term-life insurance policy is expired, then they look to a senior life insurance policy to prepare for their passing. People do this because whole-life insurance can be expensive and as lives change, there are times when they don’t need full coverage. Now burial insurance policies are often bundled as part of a whole life insurance policy. For those who may not know there are several different types of whole-life insurance, one of which is final expense insurance.
Final expense insurance provides coverage for the cost of burial. Burial expenses may be an uncomfortable subject to think about, but according to the AARP and the National Funeral Directors Association, the average cost of a funeral is roughly $8,000, but after adding the cost of some hidden fees and paying for a modest headstone, that cost can exceed $10,000 easily. With the proper senior life insurance policy, these expenses can be covered, leaving you to enjoy the remaining years of your life without the worry of finding the money to cover these costs, as well as avoiding the need to have your loved one’s left to pick up the bill after you are already gone. Whole life insurance plans can last a lifetime and final expense insurance is a type of whole life insurance that generally have face amounts up to $30,000, which is designated to take care of funeral expenses.
Some people consider going with a pre-paid burial plan over a final expense insurance policy, which ensures that your laid out plans for burial service will be carried out, allowing loved ones to be free of having to plan your service. The issue with these is that if your plan is not paid for when you die, or the cost for the services increases, then you’re loved ones are left to pay the difference. Afinal expense insurance policy can cover these expenses from day one and offers the flexibility you need to make changes in life.
Final expense insurance is very affordable. The younger and healthier you are when you decide to purchase a policy, the less you will pay. The cost is lower than a normal whole life insurance policy on average, but to find the exact coverage you need you will need to contact your local independent insurance agent. Final expense insurance does not require a medical exam to receive benefits. Final expense insurance is offered for people starting at the age of 45 and the death benefit is immediate.
With immediate benefit, you will have the full amount of the policy immediately after being approved. With a modified or graded policy, the face amount is not available until a certain amount of time has passed. Generally carriers will offer a modified plan where the full amount will be there after three years, while others may offer benefits in as little as two. If a death occurs during the modified period, all carriers will return premiums paid and some will include interest.
If you have very ill health and cannot qualify for an immediate or modified plan, some insurance companies will offer a small face amount graded whole life or guaranteed issued life insurance plan. Guaranteed issue policies generally feature a max face amount of $10,000. They come with a waiting period of 36 months or so, before the full face amount is in force. In general no medical questions are asked, but some will not accept people who have a terminal illness.
If you are getting up there in age and want to ensure that your family and loved ones do not have the financial burden of having to pay for the burial expenses, then a burial whole life insurance policy may be what you need. If you are shopping for a policy you may consider talking to your local insurance agent, who will be able to walk you through various offerings, helping you find a burial and funeral expense policy that works for you.
One type is life insurance with family member beneficiaries. Many people who have traditional lie insurance just purchase enough to cover the cost of the funeral expenses. But if you do not have life insurance you can purchase life insurance with the intention of using the proceeds to cover funeral expense. You can name a family member as your beneficiary and discuss your funeral plan with them. Another option is to list the funeral director as the beneficiary. A funeral home may include a small whole life policy with a contract for funeral services, with the requirement that the director is a beneficiary on a policy. This allows you to pay for part of all your funeral expenses using the life insurance policy that you pay for and the death benefit goes to the funeral home directly, not your family.
Lastly there is the pre-need contract with the funeral home option. This often covers the cost of a burial plot, grave marker, casket and flowers for the funeral. Some polices may not specify what the death benefit can be used for. The money can be used as needed; there are no defined limits.
Depending on the type of policy, you can either have one lump-sum payment or can continue paying monthly payment. There are single premium payment options that provide coverage once the lump sum is paid. There is graded death benefit option, which means the coverage amount increases over time. You chose a five-year payment policy. The death benefit is 30 percent of the face amount in the first year, 70 in the second and 100 percent thereafter.
If you are considering funeral or final expense insurance you need to determine whether your life insurance policy or other savings may be used for funeral expenses. Your local nsurance agent will know the state-specific laws that exist, so it is important to discuss funeral insurance coverage with them.
Life Insurance for seniors
The reason that it is so difficult for seniors to find affordable life insurance is because the insurance companies see them as a greater risk compared to someone younger who has relatively good health. The reason for this is simply life expectancy. The older you are, the closer you are to death and thus the more likely the insurance company is going to have to provide their benefit.
All of that being said, just because you are older does not mean you can’t enjoy the benefits of a life insurance policy. Whether you are simply looking for burial insurance or if you are looking for a higher face amount policy, your insurance agent will be able to help you find what you are looking for.
The first thing that seniors should do when looking for an insurance policy is to find a local independent insurance agent who specializes in helping older individuals find life insurance. The agent will not only have access to senior insurance policies, but they also will be able to utilize you health to help lower your insurance rates.
Seniors shopping for life insurance should consider their health. Specifically they should look at their cholesterol levels, blood pressure, family history, height, weight and current medical conditions such as heart disease or diabetes. Diabetes becomes much more prevalent amongst elderly people because glucose levels rise anywhere from 6 to 14 MG every 10 years past the age of 50.
Seniors tend to get a little bit more leeway when it comes to their health, because insurance companies acknowledge the natural aging process. A senior with a blood pressure reading of 150/90 may still be eligible for the lowest insurance rates. Others might still issue their lowest rates when they have a slightly above average cholesterol level. Some insurance companies may ignore family history when determining their life insurance quotes for seniors.
Senior life insurance policies are becoming easier to get than in the past because of the increasing competitive insurance market. The old assumption that you are too old for a life insurance policy isn’t entirely true.
There is a term life insurance option for seniors, which allows the senior to control how long the policy will be in effect. This is a good option because you don’t want to pay for a policy longer than necessary, but at the same time you want to be sure to have enough coverage in place to protect your loved ones.
When going the term life insurance route it is important to determine how long your dependents will be dependent on your income, when your spouse will no longer be dependent on your income, and how long you have left to pay off your mortgage.
These are important because you want to ensure that your dependents and family are financially protected and do not have any surprises coming at them in the result of your death.
Finding the right life insurance policy for a senior citizen can be a difficult process. It is important to understand that there are options as you get older and that you can still benefit from a life insurance policy. To learn more about senior life insurance polices, seniors should contact their local independent insurance agents.
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